Developing High Tech Businesses in Ireland

Following publication of the Report of the Innovation Task Force in March 2010, I thought it would be interesting to dust off a report entitled Stimulating Indigenous High Tech Manufacturing Industry (SIHTMI) which I wrote back in 1983 and was published by the Education, Innovation and Entrepeneurship Research Programme.

Here is the Full SIHTMI Report  (140 pages) and a Summary.

To place 1983 in context, it was the year that:

  • The domain name system for the Internet was created.
  • Compaq launched the first portable PC.
  • 64k 8-bit memory devices were the norm.
  • Lotus 1-2-3 and the IBM PC XT were launched.
  • World market for NMR imaging machines was only 80 units.
  • UK introduced the Business Expansion Scheme to bridge the "equity-gap".
  • EEC was formulating plans for technology support programmes.
  • The US market for cellular radio services was worth less than US$200 million .

The SIHTMI Report estimated that, at that time, there were about 20-40 indigenous high tech manufacturing firms in Ireland employing between 400 and 800 people. High tech was defined as covering microelectronics, biotech, materials and speciality chemicals, specialised mechanical products and software.

The SIHTMI Report concluded that (despite hype at the time) a high tech sector didn't exist and would not develop without major changes. It indicated a need to create a national policy on high tech; to streamline state support to high tech firms; to pursue strategies based in identified niches; to establish centres of excellence and better HE/industry interaction; to encourage proven entrepreneurs and senior managers to locate to Ireland using tax breaks; to introduce tax incentives to encourage investment; and to improve the general infrastructure, environment and competitveness.

These recommendations, when compared with the Innovation Task Force's, shows just how much (or how little) progress has been made over almost three decades. Chris Horn, a well-known "tech champion" and member of the Innovation Taskforce, identified the following similarities between recommendations in the 1983 and 2010 reports:

  • need for risk capital
  • need to augment domestic entrepreneurs with attracting overseas ones
  • shortage of international commercial skills
  • need for more progressive procurement policies by the State
  • need for oversight committee for the enterprise economy with public and private sector and Ministerial engagement
  • co-ordinated focus around a single enterprise agency for delivery of support and aid
  • grant aid for early stage ventures
  • put "wood behind the arrow" in a few carefully selected market niches
  • tax incentives to foster private risk capital
  • aid, coaching, administrative support from large established companies to younger smaller ones.

This list begs the question as to why it takes so long (27+ years) to fully implement substantial but basic changes in industrial policy in Ireland.

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